ECONOMIC ZONES

SAUDI’S SPECIAL ECONOMIC ZONES EMERGE AS MAGNET FOR GLOBAL INVESTMEN

Saudi Arabia’s Special Economic Zones (SEZs), which were launched in April, have successfully attracted USD 12.6 billion of investments. The companies that signed up with the zones also represent a diverse range of industries spanning maritime, mining, manufacturing, logistics, and technology, creating new value chains within the kingdom. Notably, an additional USD 31 billion worth of investments are in the pipeline.

The SEZ licenses cover four economic zones: King Abdullah Economic City (KAEC) SEZ, Ras Al-Khair SEZ, Jazan SEZ, and Cloud Computing SEZ. All aim to reinforce Saudi Arabia's status as a premier global investment destination for a wide range of sectors. The zones also oer promising opportunities for global investors seeking to leverage Saudi Arabia's unique position at the heart of international trade routes.

The SEZs will help brandish the kingdom’s trade credentials, highlighting its competitive regulatory environment, strategic location as a logistics and supply chain hub, and its highly interconnected digital infrastructure capable of supporting a global ICT and cloud computing ecosystem.

The four SEZs are also strategically distributed across the country and represent the initial phase of an extensive, long-term programme. They complement the Riyadh Integrated Special Logistics Zone (RISLZ), which commenced operations in 2022.

Among the many advantages oered in the SEZs are competitive corporate tax rates, customs exemptions from customs duties on imports, including production inputs, machinery, and raw materials, 100% foreign ownership, and flexibility in attracting and employing top global talent.

Related to SEZs is the Regional Headquarters Program, which was initiated in 2020 and is a collaborative eort between the Ministry of Investment (MISA) and the Royal Commission for Riyadh City (RCRC). Its goal is to invite the regional headquarters of global companies to relocate to Saudi Arabia, further reinforcing the kingdom's standing in the international business stage.

    

The four zones offer a range of opportunities and cover diverse, strategic sectors that can create new revenue streams and jobs for the economy

 

KING ABDULLAH ECONOMIC CITY (KAEC) SEZ

KAEC SEZ stands as the ultimate destination for advanced manufacturing and logistics, encompassing everything from automobile supply chain operations and assembly to the production of consumer goods, ICT, and medical technology (medtech). Located along the Red Sea, a mere 90-minute journey from Jeddah Airport, this expansive 60-square-kilometre site offers unparalleled connectivity to global trade routes via the highly ecient King Abdullah Port, which is recognised as the world's most ecient port in 2022 by the World Bank. Notably, KAEC SEZ has secured anchor investment from Lucid, a prominent leader in the global electric vehicle (EV) industry, slated to manufacture 150,000 EVs annually from its base within KAEC SEZ.

JAZAN SEZ

Jazan SEZ emerges as a pivotal industrial hub and a crucial gateway for trade with rapidly expanding markets in Africa and Asia. This SEZ provides access to the region's largest port, facilitating the export of goods and the import of essential materials. Investors here can actively engage in and contribute to significant infrastructure projects within Saudi Arabia and on a global scale. This is further supported by convenient access to abundant natural and industrial resources. Situated in the fertile southwestern region of Saudi Arabia, Jazan SEZ also offers opportunities for the manufacturing, processing, and distribution of food products, addressing the escalating regional demand, and aiding in addressing food security challenges across the area.

 

RAS AL-KHAIR SEZ

Ras Al-Khair SEZ serves as a launchpad for Arabian Gulf leaders in the maritime industry. It constitutes a fully integrated marine ecosystem with a robust network of existing investors. Around 40% of the zone has already been allocated. Opportunities abound in shipbuilding and repair, oshore drilling, and various maritime value chains.

CLOUD COMPUTING SEZ

Nestled within King Abdulaziz City for Science and Technology (KACST), the Cloud Computing SEZ takes centre stage as a vibrant hub for emerging and disruptive technologies. A tangible embodiment of the kingdom's 'Cloud First' policy, this SEZ underscores Saudi Arabia's unwavering commitment to digital innovation and the burgeoning tech sector. The zone is built around an innovative hybrid model that empowers investors to establish physical data centres and cloud computing infrastructure in multiple locations across the country. It opens up novel gateways for global investors to harness the rapidly expanding global cloud market, projected to reach a value of USD 834 billion by 2027